Asia Pacific · Banks · Bonds · Brexit · Central Banks · China · Commodities · Currencies · Economic Outlook · Emerging Markets · Energy · Europe · Eurozone · Financials · Germany · Global Economy · Gold · Inflation · JAPAN · Markets Data · North America · OIL · Stock Markets · TRADE · Trasuries · Yields

Markets Update, 16 November

 

 

 

  • Global Stocks Rebound 
  • U.S. Futures Jump
  • Euro Slips, Dollar Edges Up
  • U.S. Tax plan in focus
  • Art Trophy-hunting: Salvator Mundi reaches $ 450 M.

 

 

Global stocks rebounded Thursday after the S&P 500 posted its biggest daily drop since early September.

European shares advanced for the first time in eight sessions, and U.S. stock futures pointed to a higher opening after their Asian counterparts climbed as the global risk-off mood eased.

Dollar and pound edged higher with euro, Swiss franc and yen all weakened .

98cba4d7-1fcc-44f3-814c-99266d43b094

The Stoxx Europe 600 rose 0.7% after seven straight sessions of losses—its longest losing streak in a year—while Japanese stocks reversed nearly all of Wednesday’s decline.

Financial services firms and builders were among the biggest gainers in the broad advance of the Stoxx Europe 600 Index

Futures pointed to a 0.3% opening gain for the S&P 500 ahead of a House vote later Thursday on a closely watched tax bill.

Investors seem to be regaining their appetite for risk after several days of global declines in stocks and high-yield credit that had many questioning whether the selloff could become a rout.

Volatility measures have been climbing since the record high reached last week in equities gave way to days of decline. Momentum is not what it used to be.

Global growth remains resilient and earnings forecasts strong, despite uncertainty surrounding U.S. tax overhaul, the path for China’s economy, and the U.K.’s exit from the European Union.

6e76d796-32bd-416f-91de-f7ad45a7d8eb

 

U.S. market indicator charts:

US  Durable goods maintain the downward pressure on inflation.

 

Headline CPI in U.S. :

the CPI report which showed a slight pickup in core inflation from the previous month.

What does this inflation report mean for the Fed? The central bank is set to hike rates next month , and now attention turns to next year. Should we expect another three hikes in 2018 or perhaps even four?

 

Main moves in markets, from Bloomberg:

Stocks

  • The Stoxx Europe 600 Index jumped 0.7 percent as of 7:32 a.m. in New York, the first advance in more than a week.
  • The MSCI All-Country World Index jumped 0.3 percent and the biggest increase in more than two weeks.
  • Futures on the S&P 500 Index jumped 0.3 percent.
  • Germany’s DAX Index jumped 0.5 percent.
  • The U.K.’s FTSE 100 Index rose 0.1 percent.
  • The MSCI Emerging Market Index jumped 0.9 percent.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.1 percent.
  • The euro dipped 0.2 percent to $1.1767, the biggest dip in almost two weeks.
  • The Japanese yen dipped 0.2 percent to 113.16 per dollar, the largest decrease in more than a week.
  • The British pound gained 0.1 percent to $1.3189.
  • The Swiss franc decreased 0.4 percent to $0.9926, the largest decrease in more than two weeks.

Bonds

  • The yield on 10-year Treasuries rose four basis points to 2.36 percent.
  • Germany’s 10-year yield increased one basis point to 0.39 percent.
  • Britain’s 10-year yield gained two basis points to 1.311 percent.

Commodities

  • The Bloomberg Commodity Index rose 0.1 percent to 86.07, the first advance in more than a week.
  • West Texas Intermediate crude fell 0.1 percent to $55.26 a barrel, the lowest in two weeks.
  • Gold dipped less than 0.05 percent to $1,277.71 an ounce.
  • Copper climbed 0.3 percent to $6,793.50 per metric ton.

 

Leonardo da Vinci’s rediscovered portrait of Jesus Christ sold at auction for $450.3 million, making it the most expensive work of art ever sold.

The sale reflexcts the trophy-hunting drive from billionaires from China, Qatar and other countries compete to have the most expensive art masterpiece.

In this work, da Vinci depicts Christ in flowing robes, his left hand cupping a crystal orb while his right is raised in blessing.  Da Vinci painted the portrait around 1500, and it bounced among European royals for hundreds of years before shoddy cleaning efforts and overpainting rendered it almost unrecognizable.

When it surfaced in 1958 at Sotheby’s, it sold as a “school of da Vinci” work for only £45 (about $125 at the time). But in 2005 a group of Old Master dealers and a conservator took a closer look and campaigned for its reauthentication. Ultimately, they won validation from museums and da Vinci scholars.

Salvator Mundi” comes from the collection of Dmitry Rybolovlev, a Russian fertilizer billionaire.

 

Economy News

Becoming the first GOP voice of dissent, Sen. Ron Johnson said he’s opposed to the revised Senate Republican tax plan because it unfairly benefits corporations more than other types of businesses. It comes as the House prepares to vote today on its own version of the tax bill, which would cut taxes by more than $1.4T over a decade and broadly rewrite the business tax code.

“Trade abuses harm the U.S. and its workers, but no more,” President Trump said at the White House after returning from his nearly two-week trip to Asia. “The 21 APEC leaders, for the first time ever, recognized the importance of fair and reciprocal trade, recognized the need to address unfair trade practices, and acknowledged that the [World Trade Organization] is in strong need of reform.”

Inflation in the eurozone slipped in October, as Eurostat’s second estimate was confirmed at +1.4%. That’s down from +1.5% in September and well below the ECB’s target of just below +2%. The central bank is still preparing to start winding down its bond-buying program, attributing the figures to a rebound in oil prices that has skewed year on year calculations

a0605d62-3227-45da-ba54-fa60335a9f7b
Inflation in the eurozone slipped in October, but one measure of underlying price pressures was stronger than previously thought, according to new data released on Thursday that should provide some support to the European Central Bank’s hopes that the recent dip will be temporary.

 

Wednesday’s Key Earnings

Cisco (NASDAQ:CSCO+5.8% AH giving a solid outlook.
Target (NYSE:TGT-9.9% on disappointing holiday guidance.

Stock News

Tesla: Months after teasing the big rig, Tesla (NASDAQ:TSLA) will take the lid off its electric truck at 8 p.m. PT tonight at its Design Studio in Hawthorne, CA. While it’s not the only company with plans to push forward with semis, many are eyeing Elon Musk and his efforts to kill the diesel engine. In the works for two years, the vehicle is aimed squarely at cleaning up the freight industry. TSLA +0.9% premarket.

The FCC is set to unveil plans next week for a final vote in December to reverse a landmark 2015 net neutrality order, which reclassified internet service providers as if they were utilities. The move will reignite a years-long debate that has seen Republicans and broadband providers seeking to eliminate the rules, while Democrats and technology companies support them.

With U.S. carriers looking to the next-generation of mobile networks, T-Mobile (NASDAQ:TMUS) has given a timeline for when it will get on board. “We are committed to roll out 5G across the nation by 2020,” Chief Technology Officer Neville Ray said at the Morgan Stanley European Technology, Media and Telecoms Conference in Barcelona.

Starting in September 2018, S&P Dow Jones Indices (SPGI, CME, NWS) will combine telecom, media and entertainment company shares into a single sector. The move reflects a wave of M&A and “an evolution in the way we communicate and access entertainment content.” It’s a long-anticipated overhaul of the company’s stock market indexes, including the benchmark S&P 500.

Mexico has shot down a proposal by the U.S. to include provisions in the NAFTA that would benefit AT&T (NYSE:T). “You cannot have an agreement… that gives a tailor’s cut, a perfect handiwork, to a specific company,” said Economy Minister Ildefonso Guajardo. AT&T entered the Mexican market in 2014, spending $4.4B to buy the No.3 and No.4 wireless carriers, but a recent supreme court ruling upended Mexico’s telecom reform.

The battle for AI-enabled smart speakers is also being waged in China, with Baidu (NASDAQ:BIDU) introducing its Raven H, which will go on sale in December. At 1,699 yuan ($256), it’s pricier than devices from JD.com (NASDAQ:JD) or Alibaba (NYSE:BABA), but it includes a voice-powered remote control for smart home devices. The speaker was designed by Raven Tech, a startup that Baidu acquired in February.

Square’s latest venture into the world of bitcoin is less of a validation of the cryptocurrency than it is a testament to innovation, CFO Sarah Friar told CNBC. “We’re a payment innovator. So this isn’t sellers asking to accept bitcoin, this is individuals using Square Cash (NYSE:SQ) to make payments.” Bitcoin briefly gained over 11% yesterday on the news.

While talks between the two fizzled earlier this year, Time (NYSE:TIME) is in discussions to sell itself to Meredith (NYSE:MDP), sources told the NYT. The deal is being backed by the billionaire Koch brothers and a $500M equity injection. Both sides hope to move quickly enough to be able to announce a transaction soon after Thanksgiving.

Following a preliminary vote recount, Nelson Peltz has claimed victory in his proxy fight to win a seat on Procter & Gamble’s (NYSE:PG) board, but the company refused to concede and said it wants to see a certified result before declaring a winner. Shares of P&G rose more than 3% in AH trading, indicating some investors welcomed Trian’s effort to shake up management and improve financial results.

The number of people diagnosed with Legionnaires’ disease after spending time in Anaheim or Disneyland (NYSE:DIS) increased to 15, according to Orange County health officials. While two of patients have died, neither of them visited Disneyland. Legionnaires’ disease is a form of atypical pneumonia that is usually spread by breathing in mist that contains Legionella bacteria.

Mattel has rebuffed Hasbro’s (NASDAQ:HAS) latest takeover approach, casting uncertainty over a potential merger of the world’s two largest toy companies, Reuters reports. Mattel (NASDAQ:MAT) believes the proposal undervalues the company and does not take sufficiently into account the potential for regulators to reject the deal based on antitrust concerns.

Seeking to comply with upcoming stringent rules, Volkswagen (OTCPK:VLKAY) plans to spend €10B by 2025 to develop and manufacture all-electric and plug-in hybrid cars in China. VW intends to launch 15 of the so-called new energy vehicle models over the next two to three years, and an additional 25 after 2025, China chief Jochem Heizmann told Reuters.

The EU is backing Bombardier (OTCQX:BDRAF, OTCQX:BDRBF) and the U.K. in a trade dispute with Boeing (NYSE:BA), arguing that the U.S. investigation into the CSeries program “shows significant shortcomings.” Boeing claims Bombardier launched “an aggressive campaign” to dump the CSeries in the U.S. and offered the new jet to Delta (NYSE:DAL) at “absurdly low” prices.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s